IOB March quarter net up 30% at Rs 204 cr

BS 200 SCORECARD

Public sector Indian Overseas Bank (IOB) reported 30.05 per cent growth in net profit for the fourth quarter ended March 2006 to Rs 204.44 crore compared with Rs 157.21 crore in the corresponding quarter last year. Total income increased by 17.9 per cent to Rs 1,374 crore from Rs 1,165.20 crore a year earlier.

Control over costs and higher recovery from non-performing assets (NPAs) helped earn higher income and profits, the bank's chairman and managing director, T S Narayanasami, said.

Net profit for the year ended March 2006 increased to Rs 783.34 crore from Rs 651 crore last year, and total income rose to Rs 5,134.48 crore from Rs 4,750.60 crore.

IOB's gross advances were up by 36.10 per cent to Rs 35,759 crore at the end of March 2006 from Rs 26,274.13 crore last year.

However, deposit grew by 14.21 per cent to Rs 50,529.32 crore from Rs 44,241.24 crore a year earlier.

Average yield on advances improved to 8.72 per cent from 8.81 per cent while its cost of deposits declined to 4.69 per cent from 4.74 per cent. Net interest margins (NIM) remained above 4 per cent for the year.

However, with the rise in cost of resources, fierce competition, the NIM may slip to 3.6 per cent in 2006-07, Narayanasami said.

The bank may raise lending rates especially for the sub-PLR lending. Its PLR is 11 per cent and the share of sub-PLR lending was 45 per cent in the total loans portfolio.

The deposit rates could also be reviewed based on the resource requirements.

The deposit growth is targeted at 20 per cent this year.

Narayanasami said the bank will tap bulk deposits and also raise up to $250 million through five-year overseas bonds. It would also raise Rs 500 crore of tier-II bonds to shore up its capital adequacy.

The capital adequacy ratio declined to 13.04 per cent at the end of March 2006 from 14.21 per cent a year ago.